(Bloomberg) -- Kioxia Holdings Corp.’s mammoth initial public offering contains one sign that investor demand for its shares may lack strength: unlike 97% of IPOs by other Japanese firms this year, the deal didn’t price at the upper end of the firm’s proposed range or higher.

The Bain Capital-backed memory-chip manufacturer priced its stock at ¥1,455 ($9.6), at the middle of the price range it proposed before the IPO. By contrast, out of 72 IPOs in Japan this year that gave a price range, just one ended up debuting below the upper limit, Japan Exchange Group Inc. data show.

Kioxia’s offering wasn’t all bad news: the IPO size was ¥120 billion including an overallotment option. That was Japan’s third-biggest deal this year, only surpassed by the leader, Tokyo Metro Co., and scientific-equipment maker Rigaku Holdings Corp., according to Bloomberg-compiled data.

Still, Kioxia is beset by concern that its main product, NAND memory, has yet to emerge from a prolonged slump in price. Demand for the component—mainly used in smartphones and servers for storage—has flailed since a Covid-era peak because of a severe downturn in global mobile demand. A revival in data-center construction though has helped prop up prices.

“Given the weak NAND market conditions, investors decided not to buy now,” said Tetsushi Wakayama, senior fund manager at Tokio Marine Asset Management. He said there’s a trend to prefer DRAM-related firms over NAND-linked ones. DRAM includes high-bandwidth memory that’s key for AI, so there’s strong demand for it.

Japan’s IPO market has seen the largest volume so far this year since 2018, helped by a bullish equity market supported by a policy-maker-driven push to get companies to improve their value, and signs that deflation that weighed on earnings is coming to an end. Corporate Japan is set to raise about ¥930 billion this year through initial share sales, Bloomberg-compiled data show.

Sales of NAND flash-memory-chip and solid state drive makers could increase on rising demand from AI-server customers, wrote Masahiro Wakasugi, a Bloomberg Intelligence analyst. That may prove to be a boon for the company due to its advanced NAND and SSD technologies, he wrote in a note. 

--With assistance from Vlad Savov and Edwin Chan.

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